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Disasters and the Global Economy

Disasters are expensive from every standpoint. From a larger national economic point of view, financial losses from disasters are huge. Disasters totaled $56 billion during the first half of 2013, according to a report from the Homeland Security Newswire. For the global insurance industry these losses cost $20 billion, with $17 billion coming from natural disasters. Much of these costs were a result of losses sustained from flooding. Global insurance claims for flood damage have already totaled $8 billion and will surely continue to increase throughout the rest of the year.

Costs incurred from natural and man-made disasters are usually examined from a personal and local level, but looking at the insurance costs globally creates an entirely new perspective on large scale losses for the global economy. top domains . When various worldwide disasters are accounted for, the personal costs, financial losses, and insurance costs tally to a staggering amount. Even severe thunderstorms have accounted for a significant figure in the global costs of disasters. In the Midwest alone this past spring, tornadoes led to $1.8 billion dollars in insurance claims. While the economic losses thus far this year are still below the figure for the first half of last year, insurance costs from disasters can still rise with more severe storms and flooding during the upcoming seasonal transitions worldwide.

The global costs of disasters are enormous and seem to be on the rise. From annual storms that produce high winds, lightning, fires, and rains to severe flooding, the global economic costs to society from disasters is high and will surely continue to rise as weather patterns change and storms batter region after region. Insurance coverage losses have thus far been below the average for the past ten years, but are still very high. In Alberta, Canada alone this summer, flooding caused insurance losses totaling $2 billion–representing the largest recorded loss in the country. Since flooding has been a serious problem worldwide this year, insurance and restoration costs for these events represent a significant portion of economic losses country to country, region to region.